Alleged US Fraudster Applied for St.Kitts-NEVIS Citizenship According to SEC

The Securities and Exchange Commission announced today that it filed fraud charges and obtained an asset freeze against an attorney and Nevada resident David B. Kaplan and three entities that he controls based on an allegedly fraudulent scheme that raised $15.8 million from 26 investors in eight states.

The SEC’s complaint, unsealed yesterday, was filed on May 19, 2016, in the U.S. District Court for the District of Nevada-Reno, and charges Kaplan and the three entities, Synchronized Organizational Solutions International Ltd. (SOSI), Synchronized Organizational Solutions LLC (SOS), and Manna International Enterprises Ltd. According to the complaint, Kaplan repeatedly lied to prospective investors by stating that their funds would be invested in a low-risk, private off-shore trading program that would be provide estimated monthly profits of 10 percent. The complaint alleges that Kaplan did not use investor funds as promised but instead:

Used at least $2.3 million for his personal benefit, including $592,000 to buy and re-model a condominium in Nevada, and $79,394 wired to a St. Kitts law firm to obtain St. Kitts and Nevis passports and/or citizenship for Kaplan and his wife;

Sent $1.1 million to his wife, Lisa Kaplan, a purported charitable foundation, and a corporation that Kaplan controlled;

Invested at least $360,000 in an investment program offered by WMA Enterprises LLC, an allegedly fraudulent scheme at the center of a federal criminal indictment in Ohio; and

Made approximately $1.8 million in Ponzi-like payments to other investors.

On May 20, 2016, the court issued a temporary restraining order freezing the assets of Kaplan, SOSI, and the other defendant entities, and prohibiting them from soliciting, accepting or depositing any monies from actual or prospective investors while the order is in effect. The order further requires Kaplan and the defendants to repatriate foreign assets within seven days. In addition, the court issued an asset freeze against Lisa M. Kaplan, the Water-Walking Foundation Inc., and Manna Investments LLC, the relief defendants who are alleged to have received investor funds to which they have no legitimate claim.

The SEC brought its emergency enforcement action to ensure that no further securities law violations are committed, to secure assets from potential dissipation, and to safeguard investors from further harm. The SEC’s complaint seeks to have Kaplan, his firms, and the relief defendants return their allegedly ill-gotten gains so that any remaining funds can be returned to victims of the alleged scheme. The SEC also is seeking permanent injunctions against Kaplan, SOSI, SOS and Manna International, and to have them pay a civil penalty.

The SEC’s complaint charges that Kaplan, SOSI, SOS and Manna International violated Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and charges Kaplan with violating Section 15(a) of the Exchange Act.

The SEC’s investigation was conducted by Raven A. Winters and Luz M. Aguilar and supervised by Amy S. Cotter of the Chicago Regional Office. The litigation will be led by Alyssa A. Qualls.